Commission of Inquiry into the Quality of
Condominium Construction in British Columbia
Submitted to the Lieutenant-Governor in Council
Government of British Columbia
by Dave Barrett, Commissioner
June 1998

Chapter One: The Problem Continued

VI. Housing Costs

One of the areas of concern, expressed by industry representatives, regarding the solution to this problem and ongoing regulation, is the impact on the cost of residential construction. The Commission recognizes the need to ensure that the administrative structure and programs developed, provide the greatest benefit at the lowest cost to homeowners, taxpayers, and the industry. The recommendations contained within this report incorporate this principle.

It is important for the industry and the public to understand that the cost of materials, labour, professional fees, financing costs, inspections, warranties, etc., have not been responsible for the increase in housing costs, or the lack of affordable housing. Rather, it is increased land prices.

For example, the following graph illustrates the relationship between construction costs (hard and soft costs) and land costs for single-family homes from 1986 to 1997. Although the pricing of multi-family dwellings is different; the trends remain the same. Clearly, it is the price of land, not the cost of construction, which affected the affordability of housing. Construction costs per housing unit are lower now than in 1988.

Graph 3

Graph 3
Source: CMHC

These points are further underscored by the following cost analysis of a typical 40-unit, stacked, underground parking, wood frame condominium project in Greater Vancouver.

Breakdown of Costs — 1997
Costs Percentage of Total
Hard Costs 52
Soft Costs 5
Land 43
    Total 100

Source: BC Housing. The average cost per unit is $155,000.

Finally, it should be noted that the cost of labour, as a percentage of the overall cost of construction, ranges from as little as 15 percent for high-rise structures to approximately 25 percent for single-family dwellings.


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The printed version remains the official version.

Copyright © 1998: Government of the Province of British Columbia